Today the Chairman of the Federal Reserve, Ben Bernanke, said that gold wasn't money. Congressman Ron Paul had a good sparring match with the Chairman today. Ron Paul talked to Bernanke about the fact that the national debt has gone up 5.1 trillion dollars and still the economy is in bad shape. He asked why all the money has gone to big banks and big corporations who were already making money. He also put it out there that if consumer spending is so important to the economy then maybe it would have been better to distribute the money to the consumers which would have given $17,000.00 to every single American. He said they couldn't have done any worse with the money. Paul pointed out the inflation is truly at 9% per year and that groceries and goods are up 35% according to a free market group that still figures inflation the way it was done 3 years ago before the fed's changed it.
But the best part of my day was when Ron Paul mentioned that gold was at $1,588.00 today, while the dollar has been devalued 50% and Moody's is considering downgrading the dollars rating and this is the 2nd time Moodys has mentioned doing so. Then Ron Paul asked, "Do you think gold is money?" And Bernanke paused, looked up just a little to the left and then looked back at congressman Paul and answered "No, it's an asset." Wow...really Ben! That was a big one! Bernanke went on to explain that in the trade it is called "a tail risk." People buy it when they think the economy is "really, bad bad and fear the outcomes." Well, now that does make me feel . I will sleep just fine tonight knowing how our Chairman thinks. Boy, I think it is getting a little turbulent out there...ya, better buckle up!
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